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I. Produce or buy an item The company BB Inc. manufactures a part X for its annual production. The following table presents information on production costs at a certain level. Production Level 30,000 units Direct Materiales $7.25 Direct Labor $10.75 Variable manufacturing overhead $4.90 Fixed overhead manufacturing costs $16.00 Total Cost per Unit $38.90 BB Inc. received an offer to purchase 30,000 units of the already manufactured part for $36.00 per unit. There are fixed indirect $ 9 per unit that would remain even if they were purchased. However, buying the part will allow BB Inc. to rent the production area for $ 225,000 per year. Required: Prepare a report comparing both alternatives and that reflects how much the profit would increase or decrease if you decide to buy the piece. It must include all the computations performed. II. Consider accepting a special order to produce The ROAR company manufactures a single product that sells for $ 18.00 each unit. The cost of each unit produced at a monthly production level of 10,000 units is: Direct Materials. $2.50 Direct Labor $3.25 Variable manufacturing overhead cost $.85 Fixed indirect manufacturing cost $4.60 Fixed administrative expenses $2.35 The total monthly production capacity is 12,000 units. A special order for 2,000 units was received at a purchase price of $ 14.60 per unit. Regular sales will not be affected by this order. Required: 1. How much will the monthly profit increase or decrease if ROAR accepts the special order? Please note that accepting the order will not affect the fixed costs. (15 points) 2. Suppose the company has 600 units of an earlier model of this item that were unsold last year. To dispose of the units, the company has to sell them at a reduced price through normal sales channels. Identify the unit cost that is relevant for determining the minimum price at which these units can be available. Explain why you consider that to be the relevant cost. (5 points)